Howard won't meddle in Qantas bid

The Australian AVIATION, February 5, 2007



PRIME Minister John Howard says the government should take an arms-length approach to the Qantas sale as the consortium bidding for the airline prepares to have its plan reviewed under foreign investment laws.

Consortium Airline Partners Australia has agreed to have the Foreign Investment Review Board (FIRB) consider its plan to buy the carrier amid mounting political pressure for the deal to face tougher scrutiny.

Treasurer Peter Costello today said Qantas would remain an Australian company and the government would enforce the law to ensure it did not become foreign owned.

Qantas would have to remain located in Australia and under Australian control, he said, and continue serving important domestic and regional routes.

Mr Howard said foreign investment laws should be enforced, but he warned against governments deciding on the ownership of Australian companies.

“It's very important, without prejudging anything that's done or said in relation to this matter, that we don't fall into the trap of believing or being tempted to believe that governments should decide the identity of the ownership of companies in Australia,” he told reporters.

“Nor should we fall into the trap ... of believing that we should decide whether or not somebody can properly realise the value of the shares that they own in a company.

“It may seem attractive in a particular case, but as a general rule it's far better to have a situation where markets and owners of shares determine what happens to the company, rather than governments.

“My experience has been that governments in this country are notoriously bad judges of commercial realities.”

Mr Howard repeated that the government had not ruled out opening the lucrative trans-Pacific route to competition, after last year rejecting Singapore Airlines' bid to operate between Australia and the United States.

“The open skies debate is never closed. Never,” Mr Howard said.

“I've never said, and nobody in the government has ever said we would never in the future countenance some change in relation to giving rights out of Australia to other companies, it's just that we haven't to date judged that to be appropriate.”